Crude oil prices rose on Monday as US upstream producers and refiners assessed the damage to facilities caused by Hurricane Ida. However, gains were capped as OPEC+ looked set to proceed with an agreed oil production increase in September. The international benchmark Brent was up 71 cents (0.98%) to settle at $73.41 per barrel, after touching a session high of $73.69 per barrel. Meanwhile, US WTI increased by 47 cents (0.68%) to $69.21 per barrel.
Ida had weakened into a Category 1 storm 12 hours after it made landfall and is expected to weaken further into a tropical storm. However, the storm has caused heavy damage to Louisiana’s power grids, which is expected to slow down the repair and restart of oil and gas facilities. The Bureau of Safety and Environmental Enforcement said 1.74 million bpd of offshore oil production in the US Gulf of Mexico was suspended, with hundreds of platforms remaining evacuated.
Utilities officials expect power outages to last about three weeks, slowing repair and restart energy facilities. Aerial surveys showed refineries in Norco, and Belle Chasse remained swamped a day after Ida passed. Last year, power outages left refineries idle for up to five weeks, costing owners millions of dollars in lost output. Industry analysts expect refiners to take two to four weeks to restore their operation to normal levels.
